A and B are partners of a partnership firm sharing profits in the ratio of 3:1 respectively. C was admitted for 1/5th share of profit. Machinery would be appreciated by 10% (book value 80,000) and building would be depreciated by 20% (2,00,000). Unrecorded debtors of 1,250 would be brought into books now and a creditor amounting to 2,750 died and need not pay anything on this account. What will be profit/loss on revaluation?
Answers
Explanation:
Revaluation Account
Dr side
Building depreciation 40000
Dr total 40000
Cr side
Machinery Appreciated 8000
Unrecorded Debtors 1250
Creditors died 2750
Cr total 12000
Dr is greater than Cr so there is loss on revaluation
which amounts to
40000-12000
28000 Rs
"Loss on Revaluation
A = 25152 B = 8375"
Explanation:
Journal
Machinery a/c dr 8000
Sundry Debtors a/c dr 1250
To Revaluation a/c 9250
Revaluation a/c dr 42750
To buildings a/c 40000
To Sundry Creditors a/c 2750
Therefore, Credit side is more Than Debit side. it will be loss transferred to partners
42750 - 9250 = 33500
A = 33500 x 3/4 = 25125
B = 33500 x 1/4 = 8375